Remittance, UK Taxes, and Bank Account Questions

Hello,

My wife and I have a handful of remittance, UK taxes, and bank account questions that we're trying to figure out prior to our move from Seattle to London in June, 2013 (very soon).  Here are our questions:

1)  Do US Expats typically choose "arising basis" over "remittance basis" or vice-versa? If so, why?

2)  After we move to London, we anticipate that the total gross amount of non-UK income that we will individually gain will be roughly $9,500 for my wife and $18,000 for me.  This is non-UK income from bank interest and US paychecks for work completed prior to our move to London; however, will be direct deposited to our US bank accounts while we live in London.  If we choose "arising basis", will the UK tax us on these paychecks for services we completed prior to moving to London?

3)  When we open a UK bank account and complete an initial wire transfer from our US bank account to the UK bank account, will there be any additional fee(s)/remittance/taxes that we will incur (besides the wire transfer fee)?

4)  Do you have any suggestions on what bank to use?  My wife and I have been looking at HSBC, but are open to other options.  We're interested in a bank account that has no monthly fee, does not require a large minimum balance, and has no international transaction fees (as  we plan on traveling within Europe).

Thank you very much for taking the time to answer any of these questions!

Thank you,
Greg

take a look at this:

http://www.hmrc.gov.uk/incometax/tax-arrive-uk.htm

http://www.hmrc.gov.uk/nonresidents/flowchart.pdf

http://www.hmrc.gov.uk/international/remittance.htm#2

If you meet the rules regarding entry into the UK during a tax year, then you are normally taxed only on income earned after you arrive. Income paid for work done prior to the move is considered earned before the move, based on a conversation I had with HMRC.

I have a UK HSBC checking account with no annual fees and no minimal balance.  However there are international transaction fees if you use your card to buy stuff or get cash from ATMs while abroad.  A friend of ours uses a Euro Visa card for traveling, tops it up with euros as needed on-line.  He uses this card to make cash withdrawals while traveling.  I am not a UK resident so can't take advantage of this option.

I use XE.com to transfer money from the US to our UK HSBC bank.  You'll need to set up your XE.com account before leaving the US.

2)  After we move to London, we anticipate that the total gross amount of non-UK income that we will individually gain will be roughly $9,500 for my wife and $18,000 for me.  This is non-UK income from bank interest and US paychecks for work completed prior to our move to London; however, will be direct deposited to our US bank accounts while we live in London.  If we choose "arising basis", will the UK tax us on these paychecks for services we completed prior to moving to London?

If you earned the income prior to you becoming UK resident I don't believe that there will be any UK tax liability on it, but there could be UK tax to pay on foreign interest and gains earned after you move to the UK.

If people have significant foreign gains and don't have enough UK gains to worry about loosing their UK tax allowances and capital gains allowances and also either don't have to pay the remittance basis charge or have sufficient foreign gains to make the RBC worth it then they would pay tax on a remittance basis.

You need to determine your residency and domicile status. If you are resident and ordinarily resident in the UK, but not domiciled, you can claim the remittance basis. If your annual foreign income and gains are less than 2000 GBP then you don't need to pay RBC and there will be no UK tax due on money you don't remit to the UK.

For travelling, you want a 'no load' AND 'no transaction fee' Visa or Mastercard credit card -that will give you just the Visa exchange rate which is 1% over the wholesale rate and about as good as you can get retail. The one in the UK that does that for world wide transactions is from Halifax bank. (I think Nationwide does one like this but that it's just for European transactoins.) you don't need an account with them to get the card.

If you want to get the same kind of 'no load' credit card in USD, get Capital One but get it before you leave with a US address - no one in the US will give you a new credit card if you have a foreign address, or for that matter open a bank acct, etc. I can't remember if they charge a fee to withdraw cash.

If you're not talking about transferring large amounts of USD, one of the easiest ways to do it is just by using a credit card like Capitol One to charge things (again I don't remember if they charge to take out cash). once again it's purely the Visa rate and you avoid all the bank costs of wire transfers, receiving charges, etc. which can often add up.